The cryptocurrency market has taken another step forward with the launch of the Ethereum spot ETF, which was highly sought after on its first day of trading. Christopher Jensen, Director of Digital Assets Research at Franklin Templeton, said that the acceptance of the Ethereum ETF by investors may be faster than that of the Bitcoin ETF, as many have had the opportunity to invest in the Bitcoin ETF before. The total capital inflow of the Ethereum spot ETF may be around 30% of the Bitcoin ETF's.

The Ethereum spot ETF went public and started trading in the US on Tuesday, July 23 local time. On its debut, investors were very active, with media estimating that the first nine Ethereum ETFs traded a total volume of over $1 billion.

The media pointed out that compared with the $4.6 billion trading volume of Bitcoin spot ETF on the first day of its listing in January this year, the trading volume of Ethereum ETF is a far cry from it. However, for the ETF that made its debut in the US market, it was already a strong start. Several Ethereum ETFs are expected to be among the top 50 US ETFs on the first day of trading this Tuesday.

Analysts believe that the launch of this ETF is a positive development for the cryptocurrency market and will help increase market stability and reduce volatility.

Ethereum spot ETF sought after

The Grayscale Ethereum Trust, which has the Ethereum Trust ETF, has the highest trading volume of nearly $0.458 billion, accounting for almost half of the total trading volume.

BlackRock's iShares Ethereum Trust trading volume reached $0.243 billion, which is more likely to be capital inflow compared to Grayscale ETF trading volume.

Fidelity Ethereum Trust's trading volume exceeded $0.1 billion, while the fundraising of the remaining six funds was less than $0.1 billion. The first-day fundraising appeal of 21Shares' Ethereum ETF was the smallest.

The total trading volume of these funds is as high as $1.077 billion, accounting for approximately 20% of the trading volume on the launch day of the Bitcoin ETF in January.

It is worth mentioning that transaction volume only represents the transaction size and cannot reflect the capital inflow or outflow of investors who buy or sell. Data on net inflows or outflows of funds for the Ethereum ETF may not be available until at least Wednesday this week.

Drew Walsh, Vice President of Research and Operations at Roundhill Financial, commented that the target audience for the Ether ETF and Bitcoin ETF is similar, as they are not native cryptocurrency audiences, but rather people who have recently been exposed to this asset class and want to hold cryptocurrency risk exposure.

Cryptocurrency ETFs help to increase market stability.

Some industry commentators are bullish on the investment prospects brought to the Ethereum market by the listing of the Ethereum ETF.

Grzegorz Drozdz, market analyst at Conotoxia Ltd., an investment firm, said:

Although the Ether ETF may not attract as much capital inflow as the Bitcoin ETF, they represent an important step in the development of the cryptocurrency market.

Ether is the world's second-largest cryptocurrency after Bitcoin, and its price fell on Tuesday, pulling down the price of the new ETF. Currently, the trading price of Ether is at $3,458.

Market participants believe that the launch of the ETF has important implications for the long-standing efforts to classify Ether as a commodity rather than a security. Although the US Securities and Exchange Commission has not explicitly stated that Ether is a commodity, the new product is defined as a commodity-based trust in its filing.

Moody's Senior Digital Asset Analyst Cristiano Ventricelli wrote in a report on Tuesday:

The launch has strengthened the 'legitimacy' of the US market's cryptocurrency, adding that the cryptocurrency ETF will help increase market stability and reduce volatility.

It is also worth noting that although transaction volume represents only the scale of transactions, it cannot reflect the capital inflow or outflow of investors who buy or sell. Data on net inflows or outflows of funds for the Ethereum ETF may not be available until at least Wednesday this week. The launch of the Ethereum ETF in May this year paved the way for market demand to surge, leading to a possible shortage of Ether supply. In the case of supply constraints, the price of Ether may be more sensitive to capital inflows and outflows, and the locked-up Ether may not be able to meet the new demand of the ETF, leading to further supply constraints and causing Ether prices to rise. Therefore, the listing of the Ethereum ETF may herald a key 'turning point' before the surge in cryptocurrency prices.

Last month, Bitwise's Chief Technology Officer, Matt Hougan, predicted that the Ethereum spot ETF would receive a net inflow of $15 billion within the first 18 months of listing. Media reported earlier this week that Steno Research, a research institution, forecasted that the Ethereum spot ETF could attract $15 billion to $20 billion of fund inflows in its first year, roughly the same amount as inflows into the Bitcoin spot ETF in just seven months.

Wintermute statistics show that analysts' expectations of fund inflows within one year after the listing of Ethereum ETF range from $4.8 billion to $6.4 billion. Wintermute's own analysts expect inflows of $3.2 billion to $4 billion, below this expected range.

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